Franchising
Franchising grows around 10 percent each year, with a new franchise
business opening in the U.S. every eight minutes each business day.(Source:
International Franchise Association, 1998)
Over 600,000 franchise businesses operate in the U.S. today, employing
more than eight million Americans. (Source: International Franchise
Association)
Franchise start-up costs range from about $5,000 to $500,000. (Source:
Behar, Richard, "Why Subway is the biggest problem in franchising,"
Fortune, March 13, 1998, pp. 126; Gutloff, Karen, "15 Franchises for Under
$50,000," Black Enterprise, September 1997.)
In addition to the one-time franchise fee, franchisees are required to pay
ongoing royalty costs to the franchisor, typically equal to 2 to 8 percent
of gross sales. They're also responsible for about 4 percent of sales for
advertising expenses. (Source: Caminiti, Susan, "Entrepreneurs: look who
likes franchising now," Fortune, September 23, 1991, pp. 125.)
Hot franchise ideas catering to 1990s busy families emphasize convenience.
Franchising growth is concentrated in food delivery taxis, cleaning
services, childcare, senior care, tailoring, dry cleaning, and drive thru
operations. Newly emerging trendsalso include, home based office supplies,
children's fitness and lower cost funeral supplies. (Source: International
Franchise Association)
Worker-owned Cooperatives
There are over 360 worker-owned cooperatives nationwide. In 60 percent of
them every worker is an owner. On average, there are 43 members per
worker-owned cooperative. (Source: Adams, Frank, "The ICA Group Directory
of Workers' Enterprises in North America," Industrial Cooperative
Association Group, 1991)
One of the first worker-owned cooperatives in the United States was a
1700s cooperative of cobblers in Philadelphia. (Source: from an Interview
with Frank Adams, June 29, 1998. )
Worker-owned cooperative businesses in the U.S. are concentrated in trades
ranging from ship building, textile manufacturing, printing and publishing
to income tax services and health care. (Source: Industrial Cooperative
Association Group)
ESOPs (Employee Stock Ownership Plans)
The number of ESOPs has grown from 1,600 in 1975 to over 10,000 in
1997.Each year more than 600 ESOPs are formed. (Source: National Center for
Employee Ownership)
Every day in America, about nine million people go to work at 10,000
companies with ESOPs. (Source: National Center for Employee Ownership)
Companies combining employee ownership with participative management grow
up to 11 percent per year faster than they expected. (Source: National
Center for Employee Ownership)
Productivity grew 52 percent faster in ESOP companies that also used
participative management. (Source: U.S. General Accounting Office,
GAO/PEMD-88-1 ESOPS and Corporate Performance, 1987)
91 percent of ESOPs were started as an employee benefit. 74 percent were
started for tax advantages; 70 percent, to improve productivity. (Source:
U.S. General Accounting Office, GAO/PEMD-87-8 Benefits and Costs of ESOP
Tax Incentives, 1986)
The majority of ESOP companies, 66 percent, reported improved employee
morale, and tax savings, 60 percent, as the biggest advantages to becoming
an ESOP. Over a third, 36 percent, reported higher productivity and reduced
turnover, 33 percent, as other advantages. Sixteen percent of ESOPs
reported diluted stock value and repurchase liability. Still the majority
of ESOPs, 57 percent, cite no disadvantages. (Source: U.S. General
Accounting Office, GAO/PEMD-87-8 Benefits and Costs of ESOP Tax Incentives,
1986)
Employees of about a third of ESOP companies had more non-managerial
involvement in company decision making after their companies formed ESOPs.
15 percent had formal employee involvement and 76 percent had informal
involvement. (Source: U.S. General Accounting Office, GAO/PEMD-87-8
Benefits and Costs of ESOP Tax Incentives, 1986)
Big name companies with ESOPs include: Proctor & Gamble, Xerox, McDonnell
Douglas, Rockwell International, Delta Airlines, Quaker Oats, Ralston
Purina, J.C. Penney, Georgia Pacific, Hallmark Cards, Avis Car Rentals,
Merrill Lynch, and Polaroid.
Wall Street and stock ownership
The Dow Jones Industrial Average, the best known market barometer, has
more than tripled in the last decade. (Source: Bryant, Adam, "Feeding the
New Work Ethic," The New York Times, April 19, 1998.)
Corporate underwriting is at an all time high, with securities companies
raising almost $1 trillion for corporate America in the first half of 1998.
(Source: Securities Data Company)
261 companies went public from January to June 1998, generating $21
billion. (Source: Securities Data Company, "U.S. IPOs," 1998)
The wealthiest one percent of Americans controls 50 percent of the stocks
in this country. The bottom 80 percent owns 3 percent. (Source: Federal
Reserve Board, Survey of Consumer Finances, 1995; U.S. General Accounting
Office, GAO/PEMD-87-8 Benefits and Costs of ESOP Tax Incentives, 1986)
Employees control about eight percent or $663 billion of the total
corporate equity in the country through ESOPs, stock options, and 401(k)
retirement savings and profit sharing plans. (Source: National Center for
Employee Ownership)
The number of employees receiving broad-based stock options has doubled in
the last five years from 2.5 million in 1992 to 5 million in 1997, with 1.
5 million added in the last year and a half. There are about 3,000
broad-based stock option plans in the US represented at about 11 percent of
major companies. (Source: National Center for Employee Ownership; Bryant,
Adam, "Feeding the New Work Ethic," The New York Times, April 19, 1998.)
For five years, the Employee Ownership Index (EOI), which tracks the
performance of 350 stocks in employee owned companies, has outperformed the
majority of stock market averages, including the Dow Jones Industrial
Average (DJIA) and The Standard & Poors 500 (S&P). The EOI's cumulative
stock appreciation since 1992 was 193.2 percent, whereas returns for the
DJIA & S&P were 145.51 percent and 140.55 percent. (Source: American
Capital Strategies, 1998)
Livelyhood's third one-hour special, "Honey, We Bought the Company," aired on PBS in September 1998. For information on how to order the show, call 510-268-WORK.
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